Over two-thirds of responding community foundations carried an operating surplus at the end of FY24. Community foundations rely mainly on administrative fees as their main source of revenue, with other income sources helping to cover operating costs, and unrestricted funds making up for any remaining shortfall. Relying on unrestricted funds for that purpose, however, may have an impact on the extent to which a community foundation can invest in community leadership or other mission-driven initiatives. (n=230)

80% of responding community foundations (n=165) grew their operating budgets over the previous year. Across nearly all asset size cohorts, close to two-thirds of the average community foundation’s operating budget go toward its staff (n=184).

Administrative fees are a near universal driver of operating revenues among community foundations, though there are some variances among and within different asset size cohorts. Many community foundations engage in direct fundraising from individual donors to support operations, take distributions from operating endowments, and bring in additional earned revenues by providing paid services such as philanthropic advising for other local foundations or renting out space for local events or other uses. 

This ratio is a shorthand way to refer to the “leanness” of a community foundation’s operating model but is highly informed by several factors such as the local cost of living and the depth of the foundation’s investment in various forms of community leadership. Larger community foundations will achieve an economy of scale that keeps their expense to asset ratios low relative to smaller peers. Across all asset size cohorts, the median ratio increased slightly over FY24 levels as operating budgets increased across much of the field. (n=232)

Larger community foundations tend to have specialized staff roles to serve large, diverse portfolios of donors who may require different levels of service, with additional roles in place to advance mission-driven community leadership efforts. Staff at smaller community foundations often serve multiple roles and are more likely to work directly with a larger proportion of that foundation’s donors. (n=234)

Just under 90% of reporting community foundations said that they have a policy in place to ensure that donors recommend a grant from their DAFs within some agreed-upon number of years. Per such policies, the community foundation housing the DAF may take steps to activate the funds should the donor not recommend a grant within that time. (n=174)

Large community foundations tend to manage larger DAF portfolios than their smaller counterparts, as reflected in the proportion of assets held in DAF accounts across different asset size cohorts.

Averages were used to total 100%. (n=221)

New and small community foundations tend to have relatively high proportions of endowed assets as they look to grow and sustain themselves for the long-term, while larger community foundations leverage their ability to provide flexible options to donors who may want to maintain non-endowed funds they can activate in full at any time.